Monday, December 29, 2008

On Wednesday we heard from our attorneys that the Federal Trade Commission ruled that we have to turn our confidential internal financial, marketing and planning information over to Whole Foods Market. Here’s a link to the ruling. We disagree with and are disappointed in this decision. We’re huddling with the lawyers to figure out what our next step is going to be. It looks like we're going to appeal but I’ll get back to you once we have a clear direction. This isn’t over yet.

I'm glad that Laura Gunderson, the reporter, pointed out that only 50 of the 93 companies that Whole Foods issued the subpoenas to have responded, even though the deadline is long past. It's comforting to know that we're not the only company saying "no" to these unreasonable demands.

And we appreciate that the FTC judge said "no" to Whole Foods really over the top demand that we should be forced to search through the email accounts and computer files of every New Seasons Market staff member who worked on a computer anytime in the last three years. That would have been hundreds of people.

Having said that, I can only shake my head at the judge's position that our private files will somehow be protected. The reason I'm doubtful is because this same promise was made in in this same case in 2007 and what really happened was quite different. First of all, one of Whole Foods lawyers, who is actually an employee of their company and who is on their “Leadership Team”, was allowed to see "confidential" information that was submitted. Second, the FTC accidentally posted information that was marked "confidential" on their web site. Those two incidents have contributed to my lack of confidence in the process.

Thanks again to the hundreds of people in Portland (and actually all over the country) who have offered us their support.

Update on Monday Evening 12/29As many of you know, today was the deadline that the FTC set for us to submit our internal documents to Whole Foods. Lots of people have asked what happened with that. I can tell you that we have not turned over any information, but our lawyers have told me to stop discussing the other aspects of this case for the time being. I’ll get back to you with more details as soon as I can. Thanks again for all of your interest and well wishes.

Sounds like it is time to object that the "documents requested are not relevant to the issues raised in the Complaint.." as well as file objections on other grounds as well.

Yeah, like the Protective Order prevent leaks. Are they prepared to provide and pay for the necessary security and surveillance to insure this? Licensed and bonded? Oversight?

Also, how is that they prove exactly what documentation a private company does or does not have? Is the court prepared to issue a warrant and seize your business records if they do not feel it is adequate? Also, what about restitution for the expense to produce and present said documentation? Government charges you $10 a page or something for finding and mailing you something?

Sounds like time to bring in more guns to your legal team and start attacking this from fifty different angles.

No, no, no. New Seasons doesn't have to turn over their business to Whole Foods because of the FTC order.

If you would actually READ the order, all it says is that Whole Foods and New Seasons are now joint partners. The New Seasons brand will stay the same, the stores will remain open, it's just a partnership now.

I think it's utterly ridiculous that New Seasons is claiming that this has nothing to do with them, when the FTC says there are only four retailers in the PNOS (premium natural and organic supermarkets): Whole Foods Market, Wild Oats, New Seasons and Earth Fair.

Apart from Whole Foods Market and Wild Oats, New Seasons represents one of two retailers in the PNOS market.

How is it that they can claim that they're not involved? The only thing more ridiculous than that claim is the FTC's actual complaint.

I have been a long time shopper at Whole Foods and spend hundreds of dollars there every month. I've never really shopped at New Seasons, simply because there isn't a store really close to me. For what it is worth, I won't be shopping at Whole Foods anymore and I'll be driving a few extra miles to a New Seasons and doing my business there. I have a dozen friends who shop at Whole Foods, as well, and I'll be sure to pass this info along. I also had no idea that New Seasons was a Portland-based store until reading your story-- I am always down for supporting local businesses.

I just heard about this. I am a former employee of New Season's (I worked at the Concordia store.) I quit a couple of years ago after I finished school and got a job in my field. I have been shopping at WF since then just because it was closer to my house. Now that I know this I am going to drive the extra couple of miles and support NS, instead of whacked out WF.

I used to work at the SE New Seasons Store. Now I work for the Federal Trade Commission. I plan on still shopping at Whole Foods, even though New Seasons is closer. I am trying to drive less out of concern for the environment. That being said, I hope the FTC wins this one.

Do not turn any company's confidential info to anyone. Get a better lawyer you shouldn't lose any case against these people. You've done nothing but give good service to Portland's people. And again it is of no matter to them your company's confidential information.

Lisa, Brian,It's past time to start sending press releases about this imbroglio to the national news. If all else fails, there's always not answering the subpoena--it's all the rage these days. Just ask Sarah and Todd Palin, Karl Rove, Harriet Miers, etc.

I wouldn't be at all surprised if people start picketing Whole Foods stores when word gets around. If that happens, their sales are going to plummet. They don't call Portland "Little Beirut" for nothing.

I plan on boycotting Whole Foods and will picket them too. This whole thing is just outrageous. I wish that they would just leave well enough alone and stop the crazy intimidation tactics. I am pretty sure that all the Whole Foods employees are witches. Not the good kind, either. The bad kind.

I will drive two extra miles to the Sellwood New Seasons until Whole Foods relents on this crazy vendetta. Also, they eat children.

Brian Rohter jumping in here. I just wanted to remind everybody that no matter how unhappy we might be about what's going on, we shouldn't take it out on the folks who are working in the Whole Foods stores. They are our Portland neighbors and they're not responsible for Whole Foods corporate decisions that are being made thousands of miles away.

I moved to Orenco Station two years ago from LA and had been shopping at Trader Joe's and Whole Foods for years. Of course, at the time I moved, TJs and WF had not opened in the area. Since I live within walking distance of New Seasons, it quickly became my home away from home and so even when TJs and WF opened I continued to do most of my shopping at NS. Everyone is so nice and having such a friendly place to shop has made my move to Oregon much more pleasant, since I have been VERY homesick for LA, as I lived there my whole life~~56 years at the time. I am OUTRAGED that WF is taking this action and WILL NOT SHOP THERE ANYMORE!!! Best of luck with this situation!

It would seem to me that the notion that New Seasons' private data would benefit Whole Foods' FTC case is speculative, and in the case of People's Co-op, the mere existence of a "strategic plan" would be highly speculative.

New Seasons Markets should join the other 40+ natural food enclaves and just ignore the court order. Stick it to the man, Brian! Fight the power! Mock the Federal Trade Commission! Enjoy organic produce! Make smoothies, not bombs!

Guys, just appeal until January or February. By that time we'll have a new FTC that is less pro-monopoly than the last administration. What the FTC is now demanding is totally un-American. Also, if you haven't already, reach out to SBN here in town. Your kind of fight is why they exist. Good luck!

I agree with Julian, this is un-American! There's no way that they should be doing this in a free country where we rely on a constitution and democracy! This is why you should ignore the court ordered production of documents! To defy the court and mete out what YOU believe, that is the TRUE form of justice! The little guy standing up for himself by breaking the law, that is DEMOCRACY! Fighting it out in court? Bah! The only thing that's going to get you is a decision you DO NOT agree with, and that's just un-American!

Looks like there were some major developments in a federal court hearing today about the FTC and Whole Foods Case. Among other things, Whole Foods wants the court to give it permission to examine the e-mails of one of the FTC commission members. Wonder if John Mackey is trying to get back at them for doing the subpoena of his e-mails last year. Getting interesting for sure.

As a lawyer who has done a lot of antitrust and merger work, it's not clear to me what probative value all these files have. On the other hand, the potential to have these files misused is obvious.

If the argument Whole Foods wants to make is that New Seasons can step in and take advantage of any lack of competition, there are lots of ways to get at that without digging into their private strategy files. As is obvious, spilling their strategies and plans all over an agency record (and once they are used in evidence, they are public to the world, end of story, even if they can be somewhat protected to that stage) can be very harmful to New Season's ability to compete. In fact, just paying all the legal fees is likely to prove harmful to New Seasons' ability to compete, as that is money that could have been used elsewhere.

Courts and agencies can be abused. They don't always do right or deliver justice. When they are doing bad things, it is perfectly appropriate to draw attention to the situation. Civil disobedience is a strong step to take in that cause, but, hey, it worked for Dr. King.

And talk about hypocritical! I live in Hillsboro, and New Seasons (a "local" store) is based in Portland. Last time I checked, Portland is NOT in Hillsboro. I'm sick of New Seasons pushing it's agenda on the suburbs of Portland.

Stay in the "big city" and keep your junk out of our towns and villages. It's obvious that you're trying to put the farmers markets out of business, and we're all sick of it. You and Wal Mart are not welcome here.

We own a small, local business and can't afford to shop at New Seasons very often. This will be changing as our business and income grow. (We prefer to return the love we've felt from Portlanders, who support local above all else.) That being said, I am outraged by Whole Foods' actions; the few times we shop there are now being reduced to no times we shop there. Yes, I know they employ locals, but in this situation, the most effective message is sent via our economic choices. So I'm sending my business to New Seasons.

If the definition of "local" was so extreme that Hillsboro was not local, it would be impossible to buy local produce. There would be no distinction between North Plains and New Mexico.

Your charge that New Seasons is trying to put local farmers and farmers markets out of business is the most uninformed comment on this blog. Why don't you ask the local farmers themselves who are selling tons of produce to New Seasons, are working together with New Seasons to plan their crops so they know they'll have a market, and are able to expand their production because of it?

Comparing New Seasons to Walmart shows complete ignorance of the industry on your part.

Many people in Hillsboro like New Seasons, including members of my family, and you speak for yourself and not for them.

This was the straw that broke the camel's back for me. NO MORE Whole Foods for me, not even for a quick run for half gallon of milk. On Saturday I went out of my way to go to New Season's Interstate store, even though I had just driven past Whole Foods. Stay strong, we're behind you New Seasons.

I am totally outraged at the way that the Federal Trade Commission has bowed down to the Corporate shills of Whole Foods! What happened to the America I grew up in? Since when is the party with the most money and the shrewdest legal team allowed to impose its will on the little guy? The little guy, who, at the end of the day just wants to sell wholesome produce to the people? When did the FTC first begin to assume this Solomon-like power over the citizens of America? Why does Whole Foods (corporate money-whores) get to use their lackeys (the FTC flying monkeys) to do their bidding by victimizing a completely innocent party? Where is the justice in letting the Goliath beat up the David, especially when the club Goliath uses is an arm of the government? Since when did it become a crime for New Seasons to sell fresh, local produce and offer tantalizing farm-plate specials in the Deli at the Mountain Park location?

This Federal Trade Commission ruling is an act of war. Whole Foods is a corporate monster no different from Wal-Mart. Fight them, Brian! Fight them to the death! Godspeed, green-grocer!

It is completely ignorant to state that New Seasons is anything like Walmart. This is a company that actually takes care of their employees, the environment, and their local community. Their employee benefits and wages are unheard of in the industry. They are on the cutting edge of sustainable practices to try to improve our planet with recycling, compost and with the products they buy. They donate a large portion of their profits to local charities, throw many local events and support local farmers as much as possible. This is not a greedy corporate company and it’s aggravating to hear people say the opposite. We need more companies like New Seasons. Please do your research before you speak.

Brian, fire your lawyer. The arguments presented to the judge I saw in the Oregonian were too weak. New Seasons shoppers themselves could have come up with better arguments than that.

Second, the FTC is apparently pursuing Whole Foods to help local markets you from the alleged monopoly. Go with it. Tell them that they did in fact hurt your business by acquiring Wild Oats. If Whole Foods loses this case, you could come out on top.

I know that its probably not your style to hurt the competition, but they are really asking for it with all of this. You just need to stop being a victim and play their game. If you act offensively instead of defensively, you might come out wining.

I can say with certainty that New Seasons is an unusually enlightened and honorable company. My partner works there, and since he started working there i have seen him grow in self-esteem, self-confidence and skills. He is very progressive and discerning, quick to spot hypocrisy. He is sensitive and generous and thrives in places where he can work inspired by his principles and heart, without obstruction by weird institutional practices.

New Seasons is a special place which has its source in constructive visions.

Whole Foods could never replicate that.

Nevertheless, i hope that ways will be found to not turn over material which NS has every right to hold confidential.

I have been through enough to know that good proves strongest in the end in a way that is more perfect than anything we can imagine.

I hold out that vision this time.

Thank you, Brian Rohter, for encouraging people not to be hostile to local Whole Foods staff.

We built this city on support for local farmers , and insupport of local organic foods. We are thankful to New Seasons for continuing this movement.A Texas based company such as Whole Foods will never be successful in its endeavor to dictate to Oregonian's food choices .Thank you New Seasons !

I too have told all my friends and co-workers about this travesty that Whole Foods is engaged in. We have all stopped shopping there. We are all extremely disappointed in Whole Foods trying to choke the life out of the best local food market with their legal wrangling. It makes me physically ill.

It makes me so happy to see New Seasons jammed up in the disparity between its dual ambitions. Every half-oiled press release they write about their local benevolence is offset by another in-store capitulation to their corporate ambitions.

The quality and creativity of the New Seasons brand expired long ago, and their faulty ideals translate directly into damage to any local producers who risk becoming involved with the chain. Rohter can play his fiddle and pose like a pariah, but really interested members of the food community could care less what happens to his neon-green box stores crammed with overweight social workers and clammy schoolteachers.

Portland, dig into your own gardens, local coops, farmer's markets, and community supported agriculture! Chrissakes! It's Oregon! Good food can't be any easier to get than it is here! Go outside! Plant beans!

Gotta admit that I've no idea about the local politics of New Seasons. I've shopped at both NS and WF, and can say that NS invariably has friendlier and much more well-informed staff. They have FAR better produce, carry great products, but know that some of us do want to eat actual Cheerios or Coca-Cola, so they carry those as well. NS seems to be slightly more expensive for most grocery items (except produce).

Sadly I live in the New Seasons vacuum SW of the city, and have been surrendering to the Bridgeport Whole Foods to save the drive.

It may be worth the extra drive after reading this.

If New Seasons wants to "take over" the Portland metro area, all the more power to them. Please take over some of the Wilsonville area!